How we assess your application
Once you've submitted an application for one of our products, the next stage of the process is for us to fairly and openly assess the risks involved in lending to your business. An essential part of this involves using credit scoring and credit references.
Here you'll discover how credit agencies work and what you can do to start improving your ongoing credit score now. You'll also discover how you may be able to use our business lending appeals process to have the decision reviewed if your application is declined.
How to improve your credit scoring
It's never too early to start taking practical steps to improving and maintaining your credit scoring as it will increase your chances of being accepted for business finance in the future. Here are some things you can do to improve your credit score:
- Make sure that the turnover through your account is as regular as possible
- Ensure that if you have an overdraft, your account balance is periodically in credit and that you don't rely on your overdraft
- Develop a history of successfully repaying borrowing
- Pay credits into your account irregularly or have periods with no credits at all
- Go overdrawn without a limit or go over your agreed limit
- Run a continual overdraft as this may indicate you're not managing cash flow effectively
- Issue cheques or other payment instructions while there are insufficient funds in your account
Bear in mind that if you have a personal account with us, that account is also included in our overall assessment of any borrowing request you make. Also, the earlier you approach us to discuss any future requirements or issues that you anticipate, the more options we may have to help address them with you.
How credit reference agencies work
When we're assessing your application, we'll ask for information from the credit reference agencies on both your business and the individual owners.
The information that credit reference agencies hold falls into three broad categories:
- Positive data including how long you've maintained your account, past borrowing successfully repaid and current status on existing credit facilities
- Negative data including late or missed payments, banks returning payment instructions, defaulted debts and multiple applications for credit in a short period
- Warnings including court orders on County Court Judgments (CCJs) for defaulted debts and bankruptcy notices (banks often will not lend if these appear on the credit reference, even if the debts have now been paid off)
Remember that allowing credit facilities with other providers to fall into arrears or defaulting on credit facilities will harm your credit reference. Even if a lender does not obtain a CCJ, this sort of information will be provided by credit reference agencies. If you make multiple applications for credit facilities over a short period of time, this will also be recorded.
If we can't lend to you as a result of information from a credit reference agency, we are not able to share the information directly with you as the information is not ours. However, you can get a copy of your credit record for a fee by contacting Experian. If your credit record contains items that are incorrect, you can apply to have them removed. To find out details of other Credit Reference Agencies that we use, please call us on 0800 587 70081.
How to use our lending appeals process
We’re keen to provide financial support to businesses likes yours by lending responsibly. Although we approve around 8 out of 10 small business lending applications, in some cases we're unable to offer the finance requested.
If your lending application is declined and you meet our qualifying criteria, you can apply to appeal the decision and have your application reassessed by our dedicated lending appeals team.
You may also appeal against the conditions of a lending offer, should you feel these are unreasonable, subject to our qualifying criteria. Appeals cannot be made against the costs of borrowing, such as interest rates or fees, or our standard terms and conditions.
Do I qualify?
You need to submit a Lending Appeal Form within 30 days from confirmation of our decision if the following circumstances apply to you:
- We are not prevented from lending to you, for example for legal or regulatory reasons or due to economic or trade sanctions
- Your existing lending is not already subject to formal demand or enforcement or legal proceedings
- You have submitted a formal lending application
- Your appeal relates to a lending application declined within the previous 30 days or for appeals relating to conditions of lending, your appeal is made before the expiry of the lending offer
- Your annual group turnover is less than £25m
- You requested lending facilities for a period of more than 30 days
For more information, read our guide to making a business lending appeal or call us on 0800 141 28711.
1Lines are open 9am - 5pm Monday to Friday, except Public Holidays. To help us continually improve our service and in the interests of security, we may monitor and/or record your telephone calls with us.
Don't have Adobe PDF Reader? Download Adobe Reader